revise lecture 25. features of a cheque cheques features of a cheque some important features of a...
TRANSCRIPT
Cheques
Features of a Cheque• Some important features of a cheque are
given below;1. A cheque must be in writing and duly signed
by the drawer.2. It contains an unconditional order.3. It is issued on a specified banker only.
Cheques
• Broadly speaking, cheques are of four types;1. Open cheque2. Crossed cheque3. Bearer cheque4. Order cheque
Cheques
Stale Cheque• A cheque which is issued today must be
presented at bank for payment within a stipulated period.
• After expiry of that period, no payment will be made and it is then called a stale cheque.
• Find out from your nearest bank the validity period of a cheque.
Negotiable Instrument
• The important parties to negotiable instruments are;
Promissory note: 1. Maker2. Payee3. Endorser4. Endorsee
Negotiable Instrument
Holder in Due CourseHolder in due course means any person who for
consideration becomes the possessor of a promissory note, bill of exchange or cheque payable to bearer or the payee or endorser thereof if payable to order, before the amount mentioned therein becomes payable and without sufficient cause to believe that any defect existed in the title of the person from whom he received the title.
Negotiable Instrument
Holder in Due CourseThe definition specifies that:1. The holder has to possess the instrument in
due course and before the date of maturity.2. The consideration must be legal and adequate.3. There should be sufficient cause to believe
that he possessed the instrument in good faith and with reasonable care.
Negotiable Instrument
Holder in Due Course4. The holder should not become the holder in
due course even if he received the instrument without any suspicion or knowledge about such defects.
5. Notice of any defect in the title subsequent to the date of acquisition should not affect the rights of the holder in due course.
Banker and Customer
The Banker• The role of a banker is one filled with multiple
duties and responsibilities.• There are different types of bankers and each
one is unique in his own way. • Some of these individuals work for large
corporate conglomerates while others work for small town financial institutions.
Banker and Customer
The Banker• Each banker has his own set agenda in his role
as a banker. • A banker is an individual (or an institution) who
advises his clients with regard to financial matter.
• The duties concerning saving, loans, taxes, investment and securities are all within the job realm of a banker.
Banker and Customer
• The BankerHe will provide financial assistance to the client
in accordance with their needs.
Banker and Customer
The Customer• In banking, a customer is someone who makes
use of or receive the services of the bank.• The word customer historically derives
‘custom’ meaning habbit, so a customer was someone who frequented a particular shop, who made it a habbit to purchase goods there
Banker and Customer
Duties of a CustomerAll banks carry out the customer’s instructions in
a business-like manner.In return, the customer has special duties of
cooperation and other duties of care.
A customer is bound to the following;
Banker and Customer
Duties of a Customer
1. Communication of important information and changes.
2. Unambiguous information in orders and instructions
3. Care in transmission of particular orders
Banker and Customer
• Duties of a Customer4. Use of forms5. Express notification of any special instruction6. Notification of time limits and dates7. Complaints to be made immediately8. Checking of confirmation of the bank9. Liability arising from neglect of duty
Banker and Customer
• The obligation of a banker to observe secrecy relating to affairs of his customers is an implied term of the contract between a banker and his customer.
• A banker would not divulge to third persons, without the consent of the customer, express or implied, either the state of the customer’s account or any of his transactions with the bank.
Banker and Customer
Banker’s right to charge interest and commission• The bank generates its profits from the
differential between the level of interest it pays for deposits and other sources of funds, and the level of interest it charges in its lending activities.
• All banks at any time and form time to time are entitled to charge the rate of interest on loan either by express agreement or right of custom or usage of trade.
Banker and Customer
Banker’s right to charge interest and commission• They also entitled to charge compound
interest and commission for services rendered to the customer.
• In the absence of an express agreement or without due notice, a bank is not allowed to debit charges at any date other than the customary dates.
Banker’s Right to Lien• A lien is the right of a creditor in possession of
goods, securities or any other assets belonging to the debtor to retain them until the debt is repaid, provided that there is no contract express or implied, to the contrary.
Banker’s Right to Lien• Lien is, in its primary sense, a right in one man
to retain that which is in his possession belonging to another until certain demands of the person in possession are satisfied.
• In its primary sense, it is given by law and not by contract.
Banker’s Right to Lien• A banker’s lien on negotiable securities has
been judicially defined as ‘ an implied pledge’.• A banker has, in the absence of agreement to
the contrary, a lien on all bills received from a customer in the ordinary course of banking business in respect of any balance that may be due from such customer.
Banker’s right of set-off • The of right of set-off is also known as the right of
combination of accounts.• A bank has a right to set-off a debt owing to a
customer against a debt due from him.• ‘A legal set-off is where there are mutual debts
between the plaintiff and the defendant, or if either party sue or be sued as executor or administrator, one debt may be set against the other’.
Banker’s right of set-off • From a commercial standpoint, a right of set-off
is a form of security (right) for a lender.• It is an attractive security because its realization
does not involve the sale of an asset to a third party.
• A set-off must be in the form of a cross claim for a liquidated amount, and it can be pleaded only in respect of a liquidated claim.
Deposit Account• The main banking activities consist of acceptance of
deposit from the public for the purpose of lending to businessmen and others who may seek loans.
• Actually, the money deposited in any bank is mostly the saving of the people.
• Money may be needed in future for various purposes such as medical treatment, marriages and for other events.
Deposit Account• So people keep their savings with someone
where it will both be safe and earn a return.• A bank is a such place where money once
deposited remains safe and also earns profit.
Types of deposit account• Bank deposits serve different purposes for
different people.• Some people cannot save regularly, they
deposit money in the bank only when they have extra income.
• Some, mostly businessmen, deposit all their income from sales in a bank account and pay all business expenses out of the deposits.
Types of deposit account
• Keeping in view these differences, banks offer the people the facility of opening different types of deposit accounts to suit their purpose and convenience.
Types of deposit account• Accordingly, bank deposit accounts may be
classified as;1. Savings bank account2. Current deposit account3. Fixed deposit account4. Recurring deposit account5. Salary account
Withdrawal from deposit account
• Customer deposit his savings for use in future.
• The need for money may arise any time. So customer should know how to get back your money from the bank.